How fresh $2.2bn World Bank loan will further boost value of Naira, FX reserve – Edun
By Ishaya Ibrahim
Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, has announced a $2.2 billion single-digit interest loan being expected from the World bank and another budget support facility from the African Development Bank.
Edun, disclosed this during a press briefing at the end of Nigeria’s activities at the World Bank/International Monetary Fund Spring meeting in Washington DC, the United States on Saturday.
The inflows will see Nigeria’s foreign reserves swelling by an appreciable volume which may spur the appetite of foreign investors.
Edun, who said the sources of international funding to the Nigerian economy include diaspora remittances, foreign portfolio investments, and facilities from the World Bank and other international development partners, assured that the fresh $2.25b World Bank loan will be coming shortly.
Edun said, “If you look at the fact that we have qualified for the processing, just this week to the Board of Directors of the World Bank, of the total package of $2.25 billion of what you can call, I mean, if there is no such thing as a free lunch, but it is the closest you can get to free money. It is virtually a grant. It is for about 40 years, 10 years moratorium and about 1% interest. So that also is part of the flow you can count.
“In addition, there is a similar budgetary support – low-interest funding from the African Development Bank (AfDB) and, clearly, there are ongoing discussions with foreign direct investors across many sectors.”
In a bid to strengthen its foreign exchange reserves and attract investment, Nigeria is exploring innovative avenues with particular emphasis on leveraging remittances from its diaspora community.
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The finance minister underscored the immense potential of Nigerians living abroad, acknowledging their substantial financial resources that could significantly benefit the Nigerian economy.
“There are Nigerians abroad who are thriving financially,” remarked Edun, emphasizing their capacity to make substantial contributions to Nigeria’s economic growth and development.
“The government is looking at attracting those funds and capturing those funds through a diaspora type of instrument, a diaspora bond. We think that would be a very attractive instrument for Nigerians abroad and for foreign holdings of foreign currency and we look to having a substantive, substantial and successful issue later in the year,” Edun revealed.
He further highlighted the efforts of the fiscal side of the economy in complimenting the recent monetary policy reforms by the Central Bank of Nigeria.
According to the minister, the issuing of government securities at an interest rate closer to the CBN’s monetary policy rate is an indication of the collaboration between both sides of the economy in tackling inflation in the country and attracting forex inflows.